Tax Demand Order Struck Down for Denying Hearing Rights, Emphasizing Procedural Fairness in Administrative Actions

The HC found the tax demand order invalid due to procedural irregularities. The order was passed without providing the petitioner an opportunity to be heard, violating principles of natural justice. The court set aside the original order and directed the tax authority to issue a fresh order after giving the petitioner a fair hearing.

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Issues involved:
The issues involved in the judgment are the validity of an order dated 21.06.2021 raising a demand of &8377;93,839,317.24, the lack of discussion or reference to earlier notices and replies, and the failure to provide an opportunity for a personal hearing before passing the impugned order.

Validity of the Order:
The petitioner challenged an order dated 21.06.2021 raising a demand of &8377;93,839,317.24. The proceedings began with a search of the petitioner's premises by the Department of Trade and Taxes, Delhi, relating to dues from July 2017 to October 2020. A notice dated 05.11.2020, pointing out discrepancies, was issued under Section 61 of the Central Goods and Services Tax Act, 2017. The petitioner responded to the notice on 05.12.2020, providing explanations for the alleged discrepancies. Despite requesting a personal hearing, the petitioner's request was rejected, and the impugned order was passed under Section 74 of the CGST Act. The court found the order to be unreasoned and lacking any discussion or reference to the notice and the petitioner's reply. It was held that the order was passed without following the principles of natural justice as no opportunity for a hearing was given to the petitioner.

Remand for Fresh Order:
The court allowed the petition, setting aside the impugned order dated 21.06.2021. The matter was remanded to the Proper Officer to pass a fresh speaking order after affording the petitioner an opportunity to be heard. The respondent's counsel agreed to this course of action, acknowledging the need to provide the petitioner with a fair hearing before a decision is made.

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